This is What’s in Store for the Real Economy…”There is no escape.”
by Wolf Richter
WolfStreet.com
March 15, 2016
The Census Bureau announced today that total business sales in January did what they’d been doing relentlessly for the past one-and-a-half years: they fell! This time by 1.1% from a year ago, to $1.296 trillion, and by 5% from their peak in July 2014.
They’re now back where they’d been in January 2013. Sales are adjusted for seasonal and trading-day differences, but not for price changes. And since January 2013, the consumer price index rose 2.8%! This is why the US economy has looked so crummy.
That’s bad enough. But it gets much worse.
Total business sales are composed of three categories: sales by merchant wholesalers (33% of total), by manufacturers (36% of total), and by retailers (30% of total).
Sales by merchant wholesalers took the biggest hit: they plunged 6.4% from January a year ago, to $433.1 billion.
Symptomatic for the lousy state of business investment, sales of professional equipment dropped 4.1% year-over-year, with computer equipment and software sales plunging 10.2%. Sales of electrical equipment, the largest category among durable goods, fell 5.0%. Sales of machinery fell 1.4%. And “misc. durable” sales plunged 8.6%.
The economy’s kick-butt, take-no-prisoners winner? Sales of drugs soared 11.0% to $53.6 billion. As we found out today via Express Scripts Drug Trend Report, those sales increases weren’t caused by people suddenly taking more drugs; they were caused largely by price gouging.
Turns out, prices of brand-name prescription drugs soared 16.2% in 2015! One third of these drugs had price increases of over 20%! On average, they’re up nearly 100% since 2011. This is a patent-protected, monopolistic industry that has managed to rip off every consumer and government in the US. And there’s more. Express Scripts:
Moreover, the industry faced opportunistic manufacturers who exploited monopolies with old generic medications and captive pharmacy arrangements, and ongoing scheming by compounding pharmacies to promote sales of high-priced, no-value compound medications.
The Rest…HERE
